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Monday, 23 November 09
INDONESIA MINING RULE THREATENS INVESTMENT DRIVE
 A new Indonesian mining rule, limiting contract work that can be outsourced and favouring local players, is shaping up as a new blow to plans to boost mining investment in Southeast Asia's biggest economy.
The rule, attached to a mining law passed last year, presents an immediate challenge for new energy and mining minister Darwin Saleh, who was sworn in last month amid hopes that a new government could boost the resources sector.
The mining law, which replaced one issued 41 years ago, aims to squeeze more benefits from rich mineral reserves in Indonesia, the world's top exporter of tin and thermal coal and a key producer of zinc, copper, nickel and gold.
But Indonesia has seen little new foreign investment in metal mining in recent years and the energy and mining ministry's new rules seems likely to dampen enthusiasm among potential investors.
"It will increase costs for miners because they have to buy their own equipment and hire new people," said Priyo Pribadi Soemarno of the Indonesian Mining Association.
To contain costs, most mining firms in Indonesia, particularly coal firms, rely on contractors for work ranging from actual mining to stockpiling of minerals.
But the new regulation limits contractors to stripping away top soil and transporting mining products, while the miner itself has to extract minerals.
The move would encourage inefficiency and was out of step with global trends, said Soemarno, the executive director of the mining group. "Mining companies globally are trying to slim down their organisations," he said.
Former Mining and Energy Minister Purnomo Yusgiantoro signed the new regulation at the end of September.
His successor, a suprise pick in President Susilo Bambang Yudhoyono's cabinet last month, has not publicly commented on it and little is known of his policy stance.
Indonesia has struggled to lure foreign investment into mining in recent years, compounded by some politicians taking a nationalist line on resource exploitation and also because of uncertainty over regulations.
Major global resource firms operating in Indonesia include Freeport-McMoRan Copper & Gold Inc and Newmont Mining Corp, but much of the investment was made decades ago.
Investment in mining, including coal and geothermal, rose to $1.65 billion in 2008 from $1 billion in 2004 but mostly came from existing miners rather than new entrants.
Some foreign firms have already shelved investment plans since last year, partly due to uncertainties over the new mining law, which also includes contentious items such as shorter-term mining permits rather than longer-term contracts of work.
Miners will also have to process minerals in Indonesia and to set aside some of their coal for the domestic market.
COAL MINERS TO SUFFER MOST
The new mining services rule limits miners' use of contractors, and when allowed to use one, they must give a local contractor first preference and need the energy ministry's permission to hire affiliates.
David Kiu, an analyst at Eurasia Group, said the new rule was mainly aimed at curtailing transfer pricing, a practice rife in Indonesian mining, by which firms in the same group sell to each other at artificial prices to avoid taxes.
The new regulation applies immediately to new mining projects but allows existing miners a term of three years to adjust.
The regulation will have a bigger impact on coal producers, since they tend to use mining contractors for nearly all their mining activities, some experts said.
PT Adaro Energy Tbk, Indonesia's largest coal miner by market value, and PT Berau Coal, the fifth-biggest by volume, currently outsource their entire mining activities.
Sacha Winzenried, a mining partner at PricewaterhouseCoopers Indonesia, said coal companies would have to do more themselves and weigh up local contractors over foreigners.
"This will result in increased expenditures on capital equipment," Winzenried said.
Miners whose affiliates carry out mining activities might need to restructure their businesses after the end of the exemption period, he added.
"It's either by merging the contract mining business with the mining company or transferring the assets, or selling-off the contract mining altogether," Winzenried said.
Companies are still assesing the cost impact, although rating agency Fitch said it did not see negative rating implications for firms it covers including PT Adaro Indonesia and PT Indika Energy Tbk
But an executive at a top coal firm, who declined to be identified, said the regulation would significantly increase the requirements for capital, possibly limiting expansion.
"By employing contractors, this limits the capital requirements for heavy equipment and therefore we can expand faster."
The Indonesian Mining Association fears mining investment could fall below $1 billion this year due to uncertainty over the new law, although the government has said investment from mining -- including geothermal -- could surpass $2 billion.
Last year, mining giant BHP Billiton scrapped a study to develop an integrated nickel project in eastern Indonesia and decided not to go ahead with a coal mine in Central Kalimantan. Tsingshan Mineral Company Ltd had scrapped a $500 million nickel project in North Maluku in Indonesia.
"If the regulation is not amended, new investors will think over before investing because it will increase costs and not every mining company is capable of increasing their investment," said Soemarno of the Indonesia Mining Association.
Source: Reuters / Alibaba
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Sunday, 20 December 09
GLOBAL COAL MAJORS MAKE THEIR PRESENTATIONS
Major energy companies from four countries, including the U.S., Indonesia and South Africa, have completed detailed presentations before a committee ...
Saturday, 19 December 09
THE FUTURES FOR 2010 - 2012 FIRMED UP COMPARED TO LAST WEEK AND WAS AT AROUND CAPE US$ 28,000 PER DAY - VISTAAR
COALspot.com (Singapore): The freight market continued to soften this week with major drop in the cape size index by almost 21 pct and Panamax , Sup ...
Friday, 18 December 09
CARGOTEC WINS IBJ'S BEST SHIP LOADING / UNLOADING SYSTEM AWARD WITH SIWERTELL
Cargotec’s Siwertell ship unloader has recently won International Bulk Journal’s best ship loading/unloading system award for 2009; out ...
Friday, 18 December 09
THERMAL COAL PROJECT MOVES AHEAD
A proposal for Australia's largest thermal coal project in Queensland's central west has taken a step forward.
Hancock Prospecting is proposing ...
Friday, 18 December 09
CHURCHILL MINING COMPLETES FEASIBILITY STUDY FOR EAST KUTAI COAL PROJECT
Churchill Mining Plc has announced the completion of the feasibility study for its flagship project, the 75% held East Kutai coal project in Indones ...
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- Ministry of Mines - Canada
- GAC Shipping (India) Pvt Ltd
- Global Business Power Corporation, Philippines
- Vedanta Resources Plc - India
- Essar Steel Hazira Ltd - India
- Mintek Dendrill Indonesia
- Thiess Contractors Indonesia
- Gujarat Electricity Regulatory Commission - India
- Asmin Koalindo Tuhup - Indonesia
- South Luzon Thermal Energy Corporation
- Ambuja Cements Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Borneo Indobara - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Karaikal Port Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- The University of Queensland
- Xindia Steels Limited - India
- Siam City Cement PLC, Thailand
- Banpu Public Company Limited - Thailand
- Maharashtra Electricity Regulatory Commission - India
- Leighton Contractors Pty Ltd - Australia
- Neyveli Lignite Corporation Ltd, - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Energy Link Ltd, New Zealand
- Riau Bara Harum - Indonesia
- Petron Corporation, Philippines
- Coal and Oil Company - UAE
- Salva Resources Pvt Ltd - India
- Mjunction Services Limited - India
- Vizag Seaport Private Limited - India
- Agrawal Coal Company - India
- Ministry of Transport, Egypt
- IHS Mccloskey Coal Group - USA
- Port Waratah Coal Services - Australia
- Ministry of Finance - Indonesia
- Maheswari Brothers Coal Limited - India
- Sarangani Energy Corporation, Philippines
- Orica Mining Services - Indonesia
- Simpson Spence & Young - Indonesia
- Wood Mackenzie - Singapore
- VISA Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Billiton Holdings Pty Ltd - Australia
- Bhoruka Overseas - Indonesia
- Antam Resourcindo - Indonesia
- Economic Council, Georgia
- Iligan Light & Power Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Sidhee Cement - India
- The State Trading Corporation of India Ltd
- Larsen & Toubro Limited - India
- Makarim & Taira - Indonesia
- San Jose City I Power Corp, Philippines
- Georgia Ports Authority, United States
- Commonwealth Bank - Australia
- White Energy Company Limited
- Globalindo Alam Lestari - Indonesia
- ICICI Bank Limited - India
- Coastal Gujarat Power Limited - India
- Heidelberg Cement - Germany
- CNBM International Corporation - China
- Indika Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Indonesian Coal Mining Association
- Mercuria Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- PNOC Exploration Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Tata Chemicals Ltd - India
- Romanian Commodities Exchange
- New Zealand Coal & Carbon
- Rio Tinto Coal - Australia
- GN Power Mariveles Coal Plant, Philippines
- Global Coal Blending Company Limited - Australia
- PowerSource Philippines DevCo
- CIMB Investment Bank - Malaysia
- AsiaOL BioFuels Corp., Philippines
- Mercator Lines Limited - India
- Orica Australia Pty. Ltd.
- Petrochimia International Co. Ltd.- Taiwan
- TeaM Sual Corporation - Philippines
- Trasteel International SA, Italy
- Sinarmas Energy and Mining - Indonesia
- Marubeni Corporation - India
- Bulk Trading Sa - Switzerland
- Energy Development Corp, Philippines
- Thai Mozambique Logistica
- Kumho Petrochemical, South Korea
- Goldman Sachs - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Pipit Mutiara Jaya. PT, Indonesia
- Metalloyd Limited - United Kingdom
- Intertek Mineral Services - Indonesia
- European Bulk Services B.V. - Netherlands
- Cement Manufacturers Association - India
- Kaltim Prima Coal - Indonesia
- Aboitiz Power Corporation - Philippines
- Sojitz Corporation - Japan
- Merrill Lynch Commodities Europe
- Gujarat Mineral Development Corp Ltd - India
- Indian Energy Exchange, India
- Straits Asia Resources Limited - Singapore
- Directorate General of MIneral and Coal - Indonesia
- ASAPP Information Group - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Attock Cement Pakistan Limited
- Bangladesh Power Developement Board
- MS Steel International - UAE
- PetroVietnam Power Coal Import and Supply Company
- Sree Jayajothi Cements Limited - India
- Bukit Baiduri Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Electricity Authority, New Zealand
- Kobexindo Tractors - Indoneisa
- Eastern Energy - Thailand
- Power Finance Corporation Ltd., India
- London Commodity Brokers - England
- Miang Besar Coal Terminal - Indonesia
- Samtan Co., Ltd - South Korea
- Dalmia Cement Bharat India
- Carbofer General Trading SA - India
- Bahari Cakrawala Sebuku - Indonesia
- Anglo American - United Kingdom
- Siam City Cement - Thailand
- GVK Power & Infra Limited - India
- Tamil Nadu electricity Board
- Latin American Coal - Colombia
- Barasentosa Lestari - Indonesia
- SMG Consultants - Indonesia
- Indian Oil Corporation Limited
- Bharathi Cement Corporation - India
- Krishnapatnam Port Company Ltd. - India
- Eastern Coal Council - USA
- Jaiprakash Power Ventures ltd
- Sakthi Sugars Limited - India
- Australian Commodity Traders Exchange
- Videocon Industries ltd - India
- Indo Tambangraya Megah - Indonesia
- International Coal Ventures Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Kartika Selabumi Mining - Indonesia
- Savvy Resources Ltd - HongKong
- Oldendorff Carriers - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Central Java Power - Indonesia
- Meralco Power Generation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Standard Chartered Bank - UAE
- Semirara Mining and Power Corporation, Philippines
- Interocean Group of Companies - India
- Bhushan Steel Limited - India
- Altura Mining Limited, Indonesia
- Parry Sugars Refinery, India
- Minerals Council of Australia
- Malabar Cements Ltd - India
- Jindal Steel & Power Ltd - India
- Baramulti Group, Indonesia
- Pendopo Energi Batubara - Indonesia
- Renaissance Capital - South Africa
- Singapore Mercantile Exchange
- Indogreen Group - Indonesia
- India Bulls Power Limited - India
- Directorate Of Revenue Intelligence - India
- PTC India Limited - India
- Independent Power Producers Association of India
- Madhucon Powers Ltd - India
- Lanco Infratech Ltd - India
- Aditya Birla Group - India
- Grasim Industreis Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Sindya Power Generating Company Private Ltd
- Posco Energy - South Korea
- Kepco SPC Power Corporation, Philippines
- Uttam Galva Steels Limited - India
- Sical Logistics Limited - India
- McConnell Dowell - Australia
- Cigading International Bulk Terminal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The Treasury - Australian Government
- Bhatia International Limited - India
- Kideco Jaya Agung - Indonesia
- Meenaskhi Energy Private Limited - India
- Australian Coal Association
- Price Waterhouse Coopers - Russia
- SMC Global Power, Philippines
- Bayan Resources Tbk. - Indonesia
- Medco Energi Mining Internasional
- OPG Power Generation Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Central Electricity Authority - India
- Deloitte Consulting - India
- Africa Commodities Group - South Africa
- Rashtriya Ispat Nigam Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Wilmar Investment Holdings
- Coalindo Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Parliament of New Zealand
- Star Paper Mills Limited - India
- IEA Clean Coal Centre - UK
- Formosa Plastics Group - Taiwan
- Chamber of Mines of South Africa
- Global Green Power PLC Corporation, Philippines
- GMR Energy Limited - India
- Electricity Generating Authority of Thailand
- SN Aboitiz Power Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Edison Trading Spa - Italy
- Planning Commission, India
- Binh Thuan Hamico - Vietnam
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